On November 24, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced a $4,677,552 civil monetary penalty against an anonymous U.S. individual (referred to only as “U.S. Person-1”) and their Atlanta-based real estate investment company, King Holdings LLC, for multiple willful violations of OFAC sanctions regulations. This case is rather interesting, as it involves an area where you typically don’t see obvious sanctions risks. It’s obvious this individual did not appreciate those risks. Furthermore, the transaction at issue occurs entirely within the United States with all U.S. parties.
The Real Estate Acquisition
The case centers on unauthorized dealings in a blocked residential property in the Atlanta area, owned by a family member of a Russian oligarch. The oligarch and this specific family member were both added to OFAC’s Specially Designated Nationals List (“SDN List”) pursuant to Executive Order 14024. As compliance professionals know, but real investors may not, this designation automatically blocked all property and interests in property of the SDN in the United States. Prohibited dealings included any transfer, payment, exportation, or withdrawal—from mortgaging to selling—without OFAC authorization. Thus, this Atlanta property was considered blocked and could not be bought and sold.
In September 2022, OFAC notified Fulton County, Georgia, of the property’s blocked status, and the notice was publicly recorded in October 2022 upon OFAC’s request. Despite this, the property went into foreclosure shortly after.
In January 2023, U.S. Person-1, through their investment company King Holdings LLC, purchased the property at a public auction for an undisclosed amount. Despite the foreclosure and the auction, the blocking order still followed the property regardless of ownership changes. These unlicensed transfers do not lift the sanctions restrictions.
In April 2023, OFAC learned of the auction transfer and directly contacted U.S. Person-1. OFAC explained that the property was blocked and could not be sold or transferred without authorization. OFAC even provided information on how to apply for a specific license. Ten days after that outreach, on April 13, 2023, U.S. Person-1 signed for a $872,338 mortgage on the property to finance renovations. In doing so, U.S. Person-1 certified to the lender full compliance with OFAC regulations as part of the mortgage materials.
In August 2023, U.S. Person-1 listed the renovated property for sale. A sale agreement followed in December 2023 with an unwitting third-party buyer, to whom U.S. Person-1 warranted “good and marketable title” without disclosing the sanctions issues. U.S. Person-1 did not inform any party involved of the existing sanctions issues.
On February 1, 2024, OFAC learned of the pending sale and issued a cease-and-desist order to King Holdings, along with a subpoena for records relating to the property and its pending sale. U.S. Person-1 provided documents and information relating to the renovations but did not provide any information related to the pending sale. U.S. Person-1 then certified, under penalty of perjury, to the accuracy and completeness of this response. Days after providing this response, U.S. Person-1, through counsel, certified in writing to their compliance with the cease-and-desist order. Despite the order, U.S. Person-1 and King Holdings closed on the sale of the property to a third-party buyer. The property sold for $1.4 million, which led to approximately $478,000 in profit for U.S. Person-1 (and, as a reminder, this person ultimately paid more than $4 million in subsequent fines).
OFAC’s Findings
OFAC assessed the violations as egregious under its Economic Sanctions Enforcement Guidelines, imposing the statutory maximum penalty without any reduction. The agency cited two violations of the Russian Harmful Foreign Activities Sanctions Regulations (31 C.F.R. § 587.201(a)) for the prohibited dealings and one violation of the Reporting, Procedures and Penalties Regulations (31 C.F.R. § 501.602(a)) for the incomplete subpoena response. OFAC ultimately determined the conduct here to be egregious and willful.
Aggravating Factors:
- U.S. Person-1 acted willfully by dealing in the blocked property for nearly a year after receiving clear and actual notice from OFAC that all dealings in the property such as those engaged in were prohibited without authorization from OFAC. U.S. Person-1 also willfully certified the accuracy and completeness of a subpoena response by King Holdings that was inaccurate and incomplete. The dealings in the property for nearly a year constituted a pattern of violative conduct.
- U.S. Person-1 was aware at all times of their conduct involving the property, including through King Holdings.
- By continuing to deal in the property despite receiving notice of its blocked status, U.S. Person-1 exposed multiple third parties to potential economic harm and legal liability and significantly damaged the integrity of OFAC’s sanctions.
- U.S. Person-1 failed to cooperate with OFAC’s investigation by certifying an inaccurate and incomplete subpoena response by King Holdings.
OFAC did not identify any mitigating factors.
As OFAC emphasized, “This enforcement action highlights the obligation of all U.S. persons, including investors and others in the real estate sector, to comply with OFAC’s sanctions regulations and orders.”
Lessons Learned from a Real Estate OFAC Enforcement Action
Ultimately, this case serves as a reminder that blocked property remains off-limits. This is a rather unique case, but this is a real scenario that many companies face when dealing with physical goods. It’s very easy to get stuck with product that can’t be moved if a customer is suddenly sanctioned. If that happens, an authorization is needed just to dispose of the goods, never mind a sale or transfer.
The key issue here, however, is to heed warnings directly from OFAC. Most entities will only hear from OFAC following a violation. If you’re lucky enough to receive a warning ahead of time, you better believe that you need to comply. It’s hard to imagine what the investor was thinking here. Perhaps they believed that their liability was extinguished upon the sale; essentially, it was someone else’s problem at that point. Alas, they learned an expensive lesson to the contrary.
All that said, there are still some useful lessons that all compliance professionals can learn from this case.
- Conduct a Thorough Sanctions Review at Every Stage – Sanctions issues can sometimes lurk in unique places. Here, OFAC provided public notice of the blocking through Fulton County Public records. Always conduct due diligence!
- Heed Direct OFAC Communications – This one should be obvious, but it still serves as a good reminder. A notice or warning letter from OFAC must be taken seriously. Ignoring it, as here, escalates violations from negligent to willful, maximizing penalties.
- Disclose Sanctions Issues Transparently – Even outside of the obvious sanctions violations, warranties of “clear title” to buyers or lenders without revealing blocks invite downstream liability. Build OFAC review and licensing requirements into transaction timelines to protect all parties.
- Respond Fully to OFAC Inquiries – Again, another obvious one. Cease-and-desist orders and subpoenas demand prompt, complete compliance. Partial or evasive responses compound violations and erode any chance of mitigation.